The acquisitions leave Nasdaq and listed traders at both firms with new bosses and uncertain futures.

The two broker dealers couldn't be more different, but then neither are the goals of their acquirers. As an IPO powerhouse, Hambrecht & Quist will augment Chase Manhattan's fixed-income investment banking. Ragen MacKenzie's strength - research and wealthy clients in the Pacific Northwest - will bolster Wells Fargo's Private Client Services Group. That unit manages money for retail clients and also owns three tiny brokerages.

Ragen MacKenzie also has a small investment banking department that Wells Fargo plans to expand, according to PCS president Dennis Mooradian.

Good Trading Record

Investment banking has certainly been good for Hambrecht & Quist's trading operation. According to AutEx, Hambrecht & Quist is on course to trade four billion shares this year, based on the advertised volume at the firm for the nine months ended Sept. 30. That's up from one billion shares five years ago. Ragen MacKenzie is on course to trade 126 million shares, up from 63 million for all of 1994, according to AutEx BlockData. Hambrecht & Quist makes markets in roughly 450 stocks, while Ragen MacKenzie is a market maker in 100 stocks.

The Problems

Ragen MacKenzie, which has five Nasdaq position and three sales traders, may be the smaller of the two firms acquired, but it may also have less to lose. (The breakdown of traders at Hambrecht & Quist was not available at press time.)

Acquisitions of entrepreneurial, free-spending regional investment banks like Hambrecht & Quist, by risk-averse commercial banks, have often resulted in problems. The Nationsbanc-Montgomery Securities and the Deutsche Bank-Alex. Brown deals are two high-profile examples of deals that led to traders running for the exits.

Hambrecht & Quist's desk head Jim Tarantino declined comment. But a trader who worked at two trading firms that were acquired by banks offered an inside look at the outcomes.

"Attitudes start changing," he said, on condition of anonymity. "It's really insipid because you get people looking around and saying, I don't want to work for a bank.' I mean what trader wants to work for a bank? They're going to limit your income by limiting your bonus and your salary."

Chase has a reputation for successful mergers as well as an aggressive investment banking culture at its Chase Securities unit, but this source is not convinced.

"Hambrecht will lose a lot of its personality, a lot of what made it Hambrecht," he said. "The traders will probably move if Chase decides they want to start doing things their own way, which they probably will. Banks do not understand the brokerage business."

Hambrecht & Quist is already losing its name. It will become Chase Securities West when the deal closes by the end of this year.